U.S. Crude Falls Below $91, Hit by New Sanctions Against Rus
Bareksa • 15 Sep 2014
A general view shows the Halfaya oilfield in Amara, southeast of Baghdad. (REUTERS/Essam Al-Sudani)
New Sanctions Against Russia Will Weaken Oil Demand Amid Ample Supplies and a Strong Dollar.
Bareksa.com - U.S. crude oil futures fell more than $1.50 a barrel to below $91 in early Asian trade on Monday over concerns that new sanctions against Russia will weaken oil demand amid ample supplies and a strong dollar.
U.S. crude was down $1.32 a barrel at $90.95 at 0000 GMT after hitting a session low of $90.63. It settled 56 cents a barrel down at $92.27 on the previous session.
ICE Brent futures for October also lost 84 cents a barrel to $96.27. On Friday, it ended 97 cents a barrel lower at $97.11.
The contract expires on Monday, adding to pressure as traders roll positions. The November contract lost 87 cents a barrel at $97.09 after it ended 90 cents lower at $97.96 a barrel previously.
On Friday, the United States imposed sanctions on Gazprom , Gazprom Neft, Lukoil, Surgutneftegas and Rosneft, banning Western firms from supporting their activities in exploration or production from deep water, Arctic offshore or shale projects.
The new measures, designed to put further pressure on President Vladimir Putin over Russia's actions in Ukraine, are a major broadening of the previous sanctions, which only banned the export of high technology oil equipment into Russia.
"Prices in both markets are expected to remain weak as northern hemisphere refineries schedule maintenance in September/October, keeping crude demand low," Australia and New Zealand Banking Group said in a daily report on Monday.
"However, the transition to heating fuels later in the year will likely support a stronger price as low inventories of these fuels are replenished."
On Thursday, the International Energy Agency's (IEA) monthly report said global oil demand growth is softening at a remarkable pace due to weaker European and Chinese economies, while adding that rising volumes of oil in storage was a good cushion against supply shocks.
Also Libya's oil industry is making a comeback as oil output has reached 810,000 bpd, according to state-run National Oil Corp (NOC) last week. The OPEC member used to pump 1.4 million until July 2013 when a wave of protests broke out at oilfields and export terminals over financial and political demands.